The dollar has kicked off the week with an attempt to gain ground after falling in the aftermath of Friday’s jobs report. Weak Chinese Services PMI and covid worries are weighing on sentiment. OPEC+ has yet to reach a deal, Bitcoin is off the weekend highs and low volume is expected later due to a US holiday.
Nonfarm Payrolls showed an increase of 850,000 US jobs in June, beating expectations for a change, yet accompanied with a moderate increase of 3.6% in wages and without substantial revisions. America is still some 6.8 million people short of its pre-pandemic workforce. For markets, the mix of robust growth and fewer inflationary pressures is a “Goldilocks” scenario.
Apart from the shortcoming within the details of the report, the publication served as a trigger to reverse some of the greenback’s gains earlier in the week. On Monday, US traders are off due to the long Independence Day holiday and the dollar is marginally off its lows.
Another reason for the greenback to recover stems from safe-haven flows. The Chinese Caixin Services PMI missed estimates by 50.3 points, reflecting mediocre growth in the sector.
The rapid spread of the Delta variant of coronavirus is another reason for concern. The UK recorded over 24,000 daily cases and the strain is also moving through Asia and Europe. Concerns about contagion and somewhat weaker vaccine resistance also weigh on sentiment.
WTI Crude Oil is trading around $75, holding onto the highs as OPEC+ members have been failing to reach an agreement on raising crude output. Negotiations continue.
Cryptocurrencies: Bitcoin is trading below $35,000 after topping that level over the weekend. A crackdown on Binance seems to be one of the downside triggers. Ethereum is changing hands at around $2,300.
SOURCES: FXSTREET
